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World Business Today

News/Business. Colleen McEdwards, Pauline Chiou. The day's global business news with a focus on international business and market trends.

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CNN

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01:00:00

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Annapolis, MD, USA

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Comcast Cable

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Port 1234

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mpeg2video

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mp2

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720

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480

TOPIC FREQUENCY

Fukushima Daiichi 10, Tepco 8, U.s. 8, Japan 7, Us 6, Tokyo 5, Nina 5, Libya 4, Sendai 4, China 3, New Zealand 3, London 3, Paris 2, Griffin 2, Jeffrey Sachs 2, Nina Del Santos 2, Jennifer Delgado 2, Hong Kong 2, Bahrain 2, Asia 2,
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  CNN    World Business Today    News/Business. Colleen McEdwards, Pauline Chiou. The day's  
   global business news with a focus on international business...  

    March 15, 2011
    4:00 - 5:00am EDT  

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and people up there are just trying to pick up the pieces. they're returning to their homes or what is left of their homes, complete and absolute ruin. so piers, this is such a tough time for the community on the northeast coast of japan. >> thanks very much. it's obviously a desperately worrying time for for them and out to them all. . >> translator: we need now for everybody to move out of the 20 kilometer radius from the number one plant. and in areas from 20 to 30 kilometers from the power plant depending on what happens at the power plant. we would like to ask you to remain indoors at home or in your offices. >> words of warning from japan's
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prime minister after a fire broke out of the fukushima nuclear power plant. this is the area affected. it's now day four for an earthquake and tsunami rocked the country. >> from cnn london, i'm nina del santos. >> you're watching cnn's continuing coverage of the aftermath of the earthquake and tsunami in japan. and we begin with key new developments. the japanese government says there has been a surge in radiation levels outside japan's fukushima nuclear power plant. and as a precaution, officials are telling everyone within a 30-kilometer radius to remain indoors. japan's official death toll from friday's quake and tsunami stands at 2,500, with more than 3,100 people still missing. on the stock markets, the nikkei 225 has nose dived for a second day in a row. first, though, andrew, all
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eyes on japan's nuclear reactors as workers struggle to cool fuel rods. after days of setbacks, a fire broke out earlier this morning at reactor number four soon after naoto kan addressed the nation and the world. >> translator: for reactor number one and reactor number three, hydrogen came out and caused a hydrogen explosion. we've also seen fire at reactor number four. radiation has spread from these reactors, and the reading of the levels seems very high. there's still a very high risk of further radioactive material coming out. >> well, the reactor number four follows what's already being called an explosive impact of reactor number two also this morning. japan chief cabinet secretary earlier said that radiation levels at the plant are now at a level that "can impact human
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health." anyone living within 30 kilometers of the plant has been advised to stay indoors and hundreds of thousands more evacuated from the surrounding area. the plant itself, 50 of the 800 staff remain as they continue to battle to make those reactors safe. >> we will continue our efforts to inject water into the reactor pressure vessel. our staff temporarily has evacuated to 1-f. in one 1-f, the remaining staff are to secure safety. >> well, there have also been explosions in the building's housing reactors one and three. meaning that there have been a total incidents of four of the reactors and number six in total, andrew. >> nina, for the latest on japan's nuclear crisis, stan
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grant joins us from tokyo. and the chief cabinet secretary has been speaking to the media in the last few minutes. what has he been saying this time? >> reporter: yeah, really crucial information. so stay with us on this. we're talking about the radiation levels. and you're mentioning there in the headlines about the dangerously high levels outside the gate. we can clarify that situation for you. now, there was a record reading inside the premises of the reactor itself. inside the reactor, not at the gate. now, that record reading was potentially dangerous to humans. that was at 400. but outside the gate, that has dropped dramatically, it is now at a level that is no longer considered to pose a threat to people. that is outside the gate. inside the gate, it was a record high, outside the gate has dropped dramatically to a level where they consider it not a threat to people.
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now, we're talking so much about radiation and exactly what it is the potential dangers and the potential risks. what we need to clarify here is what sort of radiation we're talking about. now, there is radiation, radioactive material that is created inside the reactor uranium and byproducts. there is also material released into the atmosphere when they vent, release steam to release pressure from the reactor's core. that's considered noble gases and it is less dangerous. we've been speaking to our contributing analyst jim walsh who is an exp pert in this. and this is what he had to say about the various types of radiation. >> not all is created equal. we hear the word radiation and immediately leap to thinking cancer. but there are several things to keep in mind. first of all, there's some radioactive elements. they last less than a second. some last tens of thousands of years. then there's the sort of
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intensity. some may be highly radioactive, cesium and iodine, and others not at all. and then there's the type of o radiation emitted. people forget there's three different types. gamma radiation can penetrate the skin. that's a big deal. but other types will not penetrate the skin so you can wash it off and it doesn't affect you. >> reporter: now, the concern here is about this explosion at reactor number two and did actually damage the outer casing, the protective layer that surrounds the reactor's core. if that is the case, there could be more of the nasty stuff seeping out. they don't know that yet. so at the moment, they're trying to identify exactly what that radiation is. they've continued this 20 kilometer, 12-mile no-go zone. people have been evacuated. people within a 30 kilometer zone, lock your windows and lock your doors, stay inside. in tokyo there's been also a
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reading, a very, very low-level reading of radiation. not enough to pose any direct risk. andrew? >> stan, i want to come back to the explosion in the reactor, which may or may not have affected the containment vessel, which houses the reactor core. when will we know whether that containment vessel has been compromised in a significant way if at all? >> reporter: yeah. it really comes down to when they can get in and inspect. you know, there's been a lot of talk in recent days about the fuel rods being exposed for dangerously long periods of time. and the possibility of a partial meltdown. they're basing that on all of their assumptions. that until they get to a point where they can get in there, they're not going to know. it needs to cool down to that point. and they've been talking about the suppression chamber possibly
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being damaged in this explosion, this hydrogen explosion. this morning, the suppression chamber is connected to this outer protective layer that you've been talking about. i can also bring you up to date on the situation of trying to cool those reactors. we understand that water is continuing to flow into reactors one, two, and three. they're being described in this news conference we heard from officials as being stable. however, reactors five and six are reading as rising in temperature a little, as well. so a very fluid situation, andrew. >> thanks so much for that stan grant joining us live from tokyo with the latest of the crisis, the nuclear crisis in fukushima. we want to show you incredible footage now of how the tsunami tore through a town. almost 10,000 people, half of the town's total population are missing.
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>> well, it seems as though grim numbers coming out of japan keep on going. the official death toll has now risen to 2,478. but thousands more remain missing. japanese media reports say that nearly 500,000 people whose homes were lost or inaccessible
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are taking shelter in evacuation centers like this one and about 200,000 people have been evacuated from the area around japan's fukushima daiichi power plant and that means an estimated 650,000 people have been forced from their homes because of the earthquake and subsequent tsunami, andrew. >> and nina, and the red cross has been saying it could take weeks before a full picture emerges of the damage caused in that northern region by the tsunami and the full extent of the death toll, as well. well, meanwhile fear is tightening its grip on investors in japan. losses have spread throughout asia this day and look set to make their way around the world. we'll be looking at the damage done to the markets when we come back. [ jane ] here's me. and here's my depression.
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japan. $720 billion, that is the number that we're hearing of how much has been wiped off the value of the japan stock market. that's an incredible number. and this is why. there's been another big, big selloff today. if you look at the nikkei 225, down by 10.5% at the close, it was down by 14.4% at one stage today. this was panic selling. the market players in japan were saying that everything was being sold today, particularly by the big hedge funds. they were just dumping stocks. you had this panic selling. and over the past two days, we've seen after 6.2% fall and now this 10.5% fall. if we just look at the days trading tay. this is an anatomy of what happened today. there was a selloff from the start. and then the lunch break is where the flat line is. and then another big selloff after the lunch break. and that came in reaction to the
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japanese prime minister warning of severe risk to more radiation leaks, which was the trigger for people basically to sell just about everything they had. we did see a bit of a pullback in the afternoon. but still, it's a very, very nervous market in japan at the moment. there's been a lot of big losers, obviously pretty much across the board. i want to point out this is a two-day loss, not losses today, but over the past two days, since the start of the week, some of the household names, toyota down nearly 15%, honda more than 10%, sony, 17%, tokyo electric power, this is the operator of the actual fukushima plants down 42% in the past two days. so as you see there, it has been a very, very broad-base. toyota and honda speaking about production cuts now. sony is speaking about production cuts as they wait and watch to see what happens. on top of this, of course, we have the rolling power outages now in place in japan. this uncertainty. these numbers in japan as
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opposed to yesterday where it was contained in japan have now spilled across into the other markets. there you see, there are the closing markets here. not by any measure the same sort of falls, but still big enough to to show that is now rippling out. hong kong, very liquid market here is easy to sell. hang seng down, the close was down by nearly 4%. but across the board, the sales are going on. and quickly on the currencies, the yen has been strengthening sharply against the u.s. dollar. and that's a bad sign for japanese exporters for the japanese economy in general. it has come off a bit. you see the japanese yen now 81.46, but that's definitely in a danger zone. the government and the bank of japan will not want to see those sorts of levels. there has been suggestions that the bank has been intervening to try to weaken the value of the yen. pumped another $60 billion into the economy today into the money markets to keep things cool. that followed monday's injection
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of more than $180 billion, 81.46 it's currently trading at. japan certainly has a very long and costly road to recovery ahead. but the economist jeffrey saks says he's confident the world's biggest economy will bounce back from this crisis. >> the equity markets are reflecting this huge loss of wealth, but i think the economy is as devastated as it is in that area probably will recover nationwide. the experiences even with these terrible, terrible hits, like this one the kobe earthquake in 1995, the chilean earthquake last year, and the economy as a whole -- if it's not a desperate situation like you were talking about in haiti, but rather modern and well-managed economy like japan's should bounce back. we shouldn't see a huge economic crisis other than the human and economic devastation in the area concerned. >> so no major economic crisis on top of the tragic personal
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crisis in japan. that's according to jeffrey sachs there. let's get a little more short-term now. a close look at what's happening, kirby, first of all, japan has been something of a darling in the international markets over the past few months. when you see this sort of panic selling, do you think this reaction -- what many would say knee-jerk reaction is actually overdone? >> it's hard to tell. what would be the right level? 8,200? 8,500, 9,000? we need time to assess. this is what i would call nuclear selling. it's simple. it's because of the nuclear, the unknown of the nuclear situation. and while i have great respect for jeffrey sachs, this time i'm more worried. i think that comparisons with kobe, we have to throw out the window now. i was there in the kobe situation. there was no nuclear -- the
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nuclear situation changes the game. and it's not just how bad is it in reality? it's about perception. japan is very dependent, as you know, on exports, very dependent now also on dollars coming in through tourism, especially from china and also they're trying to get domestic consumption going. this nuclear situation, whether it's minor to the actuality of human danger, or if it turns out to be major is going to dampen consumption, japanese will go back into savings mode from this whole tragedy. people are canceling their trips to japan and probably won't be going back for a long time and we're already hearing talk about women stopping buying cosmetics, food importing stopping. we're not going to trust the sushi. this is what will weigh on the economy for a long time. >> exactly. and it's what you're setting out here is a total recessionary picture, is that right? >> it's not impossible because of the nuclear situation if it
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deteriorates from here. if this is the worst of it and we find out that today's announcements were overblown, yes, we can go back to a normal cycle of a disaster, the markets take a hit. it could be hundreds of billions in this case. >> okay. >> and that would, in the end, be a boost for the economy. but keep in mind, we just don't know yet. and that's my worry here that the added situation with the nuclear accident is going to be a longer term dampener and could knock the recession back. >> a much more short-term issue. there has been a lot of chat in the market that the bank of japan could've done a lot more to ease the fears, ease the concerns of investors. not quite sure how it could have done that. we don't know. there's so many uncertainties here. do you think they have dropped the ball on this? >> look, the boj doesn't have much to do. fiscally japan is spent on a monetary policy basis, japan is
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spent. kobe, a different situation. the debt burden wasn't as bad and the boj had room to maneuver. why are they pumping short-term liquidity into the market? because they can't cut interest rates because they've been at zero for so long. the problem is, they've spent everything. so they're doing what they can do, and i wouldn't say that we should be critical of them because there wasn't -- there was more supply than demand in the money markets yesterday. they are there to make sure that there is liquidity in the market. so that's not going to be an issue. the next issue is going to be the fiscal situation. what they do with the supplementary budget to try to address this and pay for it. >> we building. >> a fiscal stimulus package coming and how the markets will react to that in the jgb markets. >> pure uncertainty and fear in the markets. >> because of the nuclear situation, investors are selling first, asking questions later. >> kirby, thanks. always good to talk to you. nina?
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well, andrew, as you just said, the uncertainty about japan has sent other markets in asia and set to take the toll on the markets here in europe and the u.s., as well. emily ruban has the latest on these numbers. it's pretty severe, isn't it? >> it is pretty severe. both closed down on monday. investors looked to lose their nerve. let's look to europe where the markets have been open for about 20 minutes. the ftse down, the dax down and the paris and zurich also down. yesterday saw shares down. they, of course, have close ties with nissan. and japan is a major consumer of luxury goods worldwide. in the uk, shares took a hit. and the u.s., uncertainty spread here on monday. the closing bell, they had recovered some of the losses from earlier in the session. shares in general electric, who
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designed all six of the reactors at the fukushima daiichi nuclear plant saw their shares down. this is where the u.s. futures market stand. the dow 30 down -- let's have a look at those. down 30, down 1.55%, the nasdaq, 1.6%, also down, and the s&p down 1.8%. >> as we were just hearing, emily, from our guests over in hong kong with andrew, fears about contagion going forward. we're talking about the world's second largest economy. >> and what investors are most concerned about is the fact that japan is one of the biggest investors. and the worry is those investors might wish to repatriate their investments. with all of the worries surrounding the nuclear situation, and much of it depends on how the bank of japan is going to respond to this. are they going to be able to do
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enough to keep investor confidence so investors don't pull their money out of there too? we'll have to wait and see. >> thank you very much for that. as we were just saying, pretty severe stuff when it comes to the implications of what's happened on friday when, of course, japan was hit by that 9.0 magnitude on the richter scale. up next, what really went wrong at the fukushima nuclear plant? we'll take an in-depth look at that. do stay with us here on cnn.
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getting official warning. so i think we should break and move. let's break and move. what's that? there's a wave coming. let's go. wave coming! which house? which house? >> soledad o'brien and the crew there experiencing a tsunami warning in the coastal city of
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higashi. the precarious nature. each new day brings new fears there is still more devastation in store. there are more aftershocks and there are more tsunami warnings. welcome back. you're watching cnn's continuing coverage of the earthquake and tsunami in japan. well, we're also watching the unrest in the middle east in north africa and a dramatic response to protests in the oil rich kingdom of bahrain. foreign forces are arriving in the gulf kingdom. some of them coming from neighboring saudi arabia. and as you can see tanks and soldiers are current through on the streets there. they're all part of the gulf cooperation councils. saudi officials said the troops went in at bahrain's request following a month of protests there at that country. well, in libya, rebels appeared to have slowed the advance. but rebels are making head way. slowly taking over rebel-held
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territory. it is unclear who controls the town of al brega, two hour's drive away from the unofficial rebel capital of benghazi. u.s. secretary of state hillary clinton is in paris to discuss libya's civil war. she's there to meet with her counterparts from france, germany, japan, and other g-8 countries. the u.s. secretary of state also met with an envoy from libya's opposition movement. she plans to visit tunisia and libya later this week and meet with opposition leaders there, as well. we're going to continue our coverage of the disaster in japan in just a moment. and we're going to be looking at the critics of nuclear energy who site safety as one of the biggest concerns. but in japan, they claim we're not being told the whole truth about the industry's safety record there. we'll be looking into that just ahead.
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air aerial pictures there of the earthquake damage in northeastern japan. there was an explosive impact to the number two reactor on tuesday and a fire blaze for several hours at the fourth reactor. japanese prime minister naoto kan earlier said that the risk of further releases of radioactive material remains very high. welcome back, you're watching cnn's special coverage of the earthquake in japan and its devastating effects. let's take a quick look at how japan's nuclear energy, one of the most important sectors of power in the country is currently structured. now, the u.n. nuclear watchdog said that electric power companies run 54 of the total nuclear reactors at 17 power stations. three of those plants have been
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facing emergencies over the last few days. fukushima daiichi, the worst affected is 50 miles south of sendai owned by tokyo electric power company. that's the largest of the nine utilities. jap japan's reactors provide about 40% of electricity for the country. japan's nuclear reactors are housed behind protective walls, but keeping some of them safe has proved a daunting task. after those disasters, the first of several explosions at the fukushima daiichi plant blew out farther of the reactor containment building. nhk has been keeping us up to date with the situation. it tells us what happened next. >> this is what a nuclear reactor looks like. the uranium inside the fuel rod inside the reactor undergoes nuclear fission. the rods emit heat generating energy. usually water cools them to
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maintain their temperature at 270 degrees celsius. but if the cooling fails, the temperature could rise to over 1,200 degrees. this temperature is hot enough to melt the fuel rods. when the earthquake hit, the first safety system to prevent a meltdown was activated. control rods rose into the reactor to stop the nuclear fission. as planned, the reactor stopped operating. but the fuel rods were still hot. water should have been circulated to cool them down. however, this didn't happen. because of a power outage right after the quake. so the second safety system turned on. the emergency diesel power generator began spraying the
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rods with coolant. but, an hour later something unexpected happened. without warning, the emergency generators stopped. around this time, the tsunami, possibly as high as 10 meters hit the power plant. experts think this is what caused the generator to fail. now the third safety system started operating. it converts steam traveling through the pipes into water. it cools the rods. but the water level went down. and the temperature continued to rise. all three safety measures had failed. >> now, long before the quake hits on friday, critics were saying that records show a pattern of what they call cover-ups when it comes to releasing facts about safety figures by the main operator of the power plants. drew griffin has that story. >> reporter: three reactors at
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the fukushima daiichi power plant are most certainly dead, never to be used again. the question is, can the danger inside be contained? can the nuclear material be continuously cooled? and can the potential for a dangerous radiation leak into the environment be averted? the tokyo electric power company tepco says so far, yes. but many say tepco has misinformed the public before which is why they carefully follow what's happening on the ground. and on the ground so far exposure testing is underway and the government has ordered 200,000 people living within 12 miles of the plant to be evacuated. >> the history of the japanese nuclear industry and the government that is very closely tight with the industry is less than glorious in regard to public information and full disclosure. and what is going on now is
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actually an illustration of that. >> reporter: an anti-nuclear activist and is extremely concerned that this crisis seemingly under some control may not be under control at all. both japanese government officials and the private owners of nuclear power plants deny that. but tepco doesn't have a history to inspire confidence. in 2002, the president of the power company and four executives resigned after it was discovered repair and inspection records were falsified. dishonest practices the company admitted later. >> it was discovered that tepco, the electric power company had covered up incidents of cracking in an important piece of equipment within the reactor vessels of all the reactors. and as a result, they were forced to close down all 17 of their reactors. >> and the plant with the worst record, fukushima daiichi, the
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plant now in trouble. >> there's a pattern emerged that tepco isn't frank and deliberately covers up to protect its own interest. >> reporter: despite promises to regain confidence, tepco's honesty was questioned again in 2007 when a 6.8 earthquake struck western japan, shaking the nuclear plant. tepco reported only a minor fire at the plant and less than a gallon of water leakage. later the public learned the fire burned for two hours and hundreds of gallons of radioactive water had leaked into the sea. the plant that is now in trouble survived the most recent quake. a quake stronger than it was designed for. by design, the reactors immediately shut themselves down. good news according to this spokesperson for the group that lobbies the u.s. congress on pro-nuclear power issues. >> i think as we've seen in
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japan, despite the magnitude of that earthquake, they hold up quite well. >> reporter: but it turns out surviving the quake was not the end of the crisis. at fukushima daiichi, the backup power supply ran for a while, then failed. when the generators failed, so did the water pumps that cooled the reactors. >> you have in total six reactors that have been under great stress with problems cooling the core. and just as you think you might have gotten control of one, then another one goes. >> drew griffin there reporting on disturbing information about tepco, the operator of the fukushima plants. now, if you want to know more about how the nuclear plant works, the steps the authorities are taking, head to our web page, cnn.com/japan for all of our coverage. you'll find the latest, the video, the extraordinary video we have been viewing of the
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devastating tsunami that has completely swept across that northern region of japan. nina? >> andrew, let's get a check in on the weather picture for japan and see how that's likely to affect operations at the fukushima plant and also search and rescue efforts. jennifer delgado standing by at the cnn weather center. what more can you tell snus. >> hi, nina, well, we're talking about the fukushima daiichi plants. right now we are dealing with an easterly flow. and that is going to continue to spread that potential for that radiation over towards areas. we're talking communities just to the west of the fukushima daiichi plant. the winds are from the east. as we go through tomorrow. talking about tomorrow morning as well as through the remainder of the day, we will see an improvement with the wind direction. winds coming out of the northwest. and that is going to provide an offshore flow.
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and that is going to be good news for residents who live over towards the west. i also want to point out to you that the winds will be peaking at 42 miles per hour. that will help with the mixing of the radiation leaking out of the plant. in addition to the winds, we're also talking about the temperatures outside. very cold. notice anywhere up towards the north, dealing with temperatures generally in the single digits. feels even cooler when you add in that wind. in addition to that, we're also going to be dealing with cold rain as well as some snow. as a storm system coming in off the sea of japan. and you can see right now, we're starting to get a bit more moisture out there. also the tail end of this system. on the backside, we're going to be dealing with some snow. it's going to be obvious right along the western coastline of japan. but we'll see spreading over towards the east for areas including the fukushima prefecture and miyagi. and sendai, this area hit so hard with the tsunami damage, they're also going to be looking at the potential for heavier
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rainfall and some of those communities and higher elevations, about 20 kilometers out toward the west, they're also going to be dealing with snow. here's the forecast for sendai. notice for today high of 3 degrees, snow around, and that's going to start to pick up into the overnight as well as into the morning. still a chance for more snow from that sea effect happening on thursday. and temperatures are going to be running well below average for this time of year. back over to you. >> not good news. thanks very much, jennifer delgado. well, as the full magnitude of japan's crisis comes to light, rescue supplies are pouring in. more on the international search and rescue effort just ahead. they're made from whole roasted nuts and dipped in creamy peanut butter, making your craving for a sweet & salty bar irresistible, by nature valley. ♪ [ male announcer ] what are you gonna miss when you have an allergy attack?
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we want to take you inside now. one of the earthquake shelters in sendai.
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this is the city of a million people. seen as one of the biggest cities toward the epicenter of the quake and the damage, the relentless damage caused by the tsunami. every imaginable bit of space has been taken up with evacuees sleeping, eating, and keeping their children occupied, as well. japanese media reports say nearly 500,000 people are taking shelter in evacuation centers just like this. remember, they also have to contend with bitter cold. and there are still shortages of power, of food, and water across their entire region. welcome back to cnn's coverage of the earthquake aftermath in japan. search teams have been arriving at the hardest hit areas in the past two days. so far, 91 countries and six international organizations have offered their help. china is sending supplies and also a search team. the chinese teams will concentrate on ofunato. u.s. search and rescue crews
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will also be in that area. japan has search teams right across the northeast region. there's a fairly narrow window with in which victims can be pulled out alive after the quake. and new zealand is a country that knows that all too well. in new zealand, rescue teams arrived in japan with an enormous amount of empathy. three weeks ago, new zealand was devastated by an earthquake itself. right now, hundreds of thousands of people as andrew was just saying are trying to make due in hundreds of evacuation centers and shelters right throughout northern japan. our chief medical correspondent dr. sanjay gupta joins me now live from the northern city of akita. good to see you, sanjay. what's the latest you're seeing in some of these shelters? >> reporter: well, you know, if you go into these shelters, for some time now people had a pretty clear idea of exactly where to go in the aftermath of the earthquake and the tsunami
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often times they wanted to get the building that was sturdier but also higher altitude because of concerns about the tsunami or future tsunamis. what we're seeing is that, you know, a fairly organized presence over there. people are coming in. there's often enough space. you're talking about hundreds if not thousands of people in some of these evacuation centers. and for the time being, there has been adequate basic necessities. we saw things like people actually creating lines to take water from swimming pools to make sure they had enough water f . there's been enough food, supermarkets in the area have been donating food to these centers, and the same goes for water. the supplies do seem to be running out. supermarkets closed, bottled water running low in many of these places. it's been a question of things have been okay so far, but now, how long will people need to stay in these centers?
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and how long will some of those basic necessities be in supply? that's sort of what they're grappling with in some of these places. >> sanjay gupta, thank you very much for that update there from the northern japanese town of akita. if you want to help the victims of the tsunami disaster, you can do so by going to cnn.com/impact. our impact your world team is collecting lots of links to organizations that are mobilizing relief efforts right across japan and will continue to add information to this page, as well. that's at cnn.com/impact.
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we continue to get new horrific images coming into us here at cnn from the tsunami the
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moment the tsunami broke. i guess the coastline of japan. these are just terrifying pictures. and you can hear in the background many of the shouts of some people who are filming and watching it. that was a wall of water. you'll remember that this is a town of 17,500 people, 9,500 people remain unaccounted for. you're watching cnn with our continuing coverage of the impact of japan's quake. well, the price of crude oil has been falling, concerns over tensions in the middle east are now being outweighed by worries that demand in japan could fall. many japanese factories and power plants remain closed four days after the country was rocked by that magnitude 9 earthquake. and as you can see there, that's helped send oil back below $100 a barrel. it's trading at $99.31. and to talk more about the global demand for oil, let's now
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go to peter who joins us now live. good to have you on the show. mr. vosa, let's talk about the japan crisis. how worried are you this could curtail demand for oil? >> yeah, good morning. let me first say that obviously our thoughts and our condolences are with the japanese people and shell is trying to supply as much fuel oil and as much l & g as we can to help the recovery work in japan. i think you have to distinguish between long-term and short-term balances of oil and gas. i've seen the shorter term i don't see huge pressure on the volume on the supply for oil because we have got quite a bit of spare capacity in the opec. and i think that's what they can bring to the market. in the longer term, quite clearly the emerging markets are driving the demand. if they keep going in the same
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way as we have seen them actually growing over the last two years, or the next four or five years, it's quite possible that we on the supply side cannot cover all the new demand which is coming. and therefore, you could see rising oil and gas prices over time. so from that point of view, it's important to actually keep investing, which shell has done over the last four, five, six years. we have never slowed down. we had the highest investments during the crisis. and i think this is absolutely needed in order to get there. and the effect of japan. >> mr. voser, how are you positioning yourself as a company for the reduction in demand specifically coming from japan? this was the world's second largest economy until recently. >> i think we are not positioning for the shorter term as i just said. we will actually go through whatever cycle comes and actually keep investing in the supply of oil and gas. this is clearly the key driver
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for us to be ready whenever the demand comes back. we have done that in the past, and we will do this also in the future. so it's a little bit early to say how much the demand will be affected by japan. there will be some effects. >> let's talk about the fallout from the nuclear incidents we're seeing at the fukushima daiichi plants. >> would you expect japan to switch more toward fossil fuels for the future? are you positioning yourself for that kind of demand? >> again, i think in the shorter term, it's quite clear that we need to help and supply fuel oil and also gas into japan to actually replace some of the nuclear power generation, which is out of service. i'm very pleased that we have agreed the ship to go back into japan. it's a little early to speculate
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on how this will come out in the end in three, four, five, six year's time, how much oil will be in japan, how much will be switching into gas, which is a fossil fuel, which is very acceptable from a co-2 point of view, reduces your co-2 footprint, et cetera. we will see how this develops in the medium and long-term. it is too early to speculate. but in general, with see gas growth across asia-pacific as the key driver for the economy and shell is the biggest player there. and we want to maintain that position. >> peter voser, thank you very much for joining us there with an update on the situation in japan and the effect for the oil markets, andrew. >> we're going to say a farewell for now. our coverage, of course, of the situation in japan continues. just news coming, air china says it has canceled flights from china into japan because of the nuclear crisis.
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i'm andrew stephens in hong kong. >> and i'm nina del santos in london. do stay with us here on cnn.
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